Explaining that the current upward trend in inflation was due to an increase in food prices, Federal Minister for Finance and Revenue Shaukat Tarin on Thursday said that inflation would start coming down from July this year.
In an interview with a private television channel, the federal minister said that Pakistan was currently importing wheat and pulses, which led to a price hike.
He also attributed increasing inflation to huge tariff margins between farmers and wholesalers, saying that huge exploitation was going on which should be curtailed.
He said the government plans to take administrative measures and build storages for creating strategic reserves of five basic commodities to check exploitation by hoarders by flooding the market when there is a shortage of any item.
In addition, he was of the view that there would be a base effect on inflation during the months of July, August, and September as the inflation was very high during the same months last year.
In addition, he expressed the hope that international food prices, which currently are very high, would also come down and help ease inflation.
The minister said, “The government did not intend to impose any new taxes during the upcoming fiscal year (2021-22) rather it will broaden the tax base with the use of technology to reach unreachable areas and enhance revenues.”
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The minister reiterated that the International Monetary Fund (IMF) programme was very tough for Pakistan.
“The IMF and the World Bank have been told that Pakistan can stop the increase in circular debt without increasing tariffs and resolved that the government will do whatever is in national interest.”
He said that despite Covid-19, which affected revenue collection, the target for the current fiscal will exceed expectations and the trend will continue next year.
To a question about decreasing tax slabs from 11 to five, the federal minister said a plan was underway to rationalise these but said the number would not come down to five.
He said the government had come with comprehensive plans in 12 different sectors to put the economy of the country on a sustainable growth path. These plans would be implemented on a short-, medium- and long-term basis with the consultation of all stakeholders.
“All is ready, within 15 days it would be presented to the prime minister,” he said, terming the plan as comprehensive planning by the government that has been undertaken for the first time in the country.
To a question on Federal Board of Revenue (FBR) innovations, the minister said that as many as 500,000 points of sales would be installed to enhance revenues.
He also reiterated that harassment by the FBR would be eliminated and a universal self-assessment strategy would be adopted which could be subjected to third party audit, adding that a special team would be established to go after tax evaders.
To a question, the federal minister said that government would fulfil requirements of defence in the upcoming budget.
He said both the Pakistan International Airlines and the Pakistan Steel Mills would be restructured and thereafter sold.
The minister said that improvement in the economy goes to Hafeez Shaikh for doing consolidation and stabilisation which led to this growth.